The Bank of France reveals that it has planned out eight experiments to study the potential applications of a central bank digital currency (CBDC).
Denis Beau, the first deputy governor of the Bank of France, says that studies involving CBDCs have jumped from the academic perspective to actual field experiments.
“The way we experiment with CBDCs for wholesale transactions perfectly illustrates our choice to move from conceptual and academic considerations, to experiments in the field, hand in hand with market players, using a pragmatic, trial and error way of working. The goal is to determine i) how digital central bank money may improve the efficiency and fluidity of payment and settlement systems, ii) what are the most promising technologies and iii) whether it makes sense to make central bank money available to beneficiaries that do not have access to it yet.”
Beau reveals the central bank has successfully completed its first experiment which looked at the nature of digital transactions.
“In May this year, we conducted a first successful and very promising experiment with Société Générale Forge, that enabled us to test the three steps of a digital transaction: the tokenization of a security, the digital representation of central bank money on a private blockchain, and the settlement of a transaction on the security on the private blockchain. This led us to interface successfully a public with a private blockchain.”
The central bank deputy governor highlights that the Bank of France is planning to conduct more studies that could potentially rewrite the existing regulatory framework underlying the country’s financial ecosystem.
“Upcoming CBDC experiments – there will be eight of them – will help us to investigate not only the potential of technology but also to question the players in the ecosystem on what tomorrow’s landscape could look like, on subjects as fundamental as the methods of exchanging financial instruments for CBDCs, the improvement of the conditions for executing cross-border payments or new ways of making CBDCs available to financial sector players. In turn, these experiments will lead us to assess whether the regulatory framework currently in force needs to be adapted since we are carrying out these experiments within the current legal framework.”
In addition, Beau notes that the Bank of France is working on an experiment spearheaded by the European Central Bank which explores the possibility of issuing a CBDC to the general public.
“This autumn, the Eurosystem has adopted a similar hands-on approach for its experiments on a digital euro for the general public, in which we are participating, alongside with the ECB and other Eurosystem central banks.”Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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